Individual schools cannot afford the high cost of instruments or tuition, and it is uneconomic for them to fund teachers of minority instruments such as the bassoon.
Music teachers gathered in London to hear the findings from the Associated Board of the Royal Schools of Music, the leading music examinations body.
The Board told of teachers being told to give ten-minute cello lessons to make money for tuition go further. Others were having to teach four children of different abilities different instruments during the same 40-minute lesson.
The survey of 3,000 children and adults found that almost all the decline in instrument playing was in families in the C1 and C2 social groups, those in clerical or junior managerial jobs and skilled manual workers.
The number of children who take instrumental lessons in schools is down from 87 to 79 per cent compared with the board's last survey three years ago.
Michael Wearne, chairman of the Federation of Music Services, said that pounds 40 million had been cut from the service over the last four years and parental money was being sucked in to fill the breach.
"It is an invasive cancer of can't pay, can't play, spreading insidiously throughout the musical body. It is potentially catastrophic for the musical health of the country."
Around 17 million children and adults play instruments, and the percentage of adults who play is increasing after a big boost to school instrumental music in the 1970s and 1980s.
The present drop among five to 10-year-olds will leave the country bereft of orchestral players, according to Richard Morris, the associated board's chief executive.
If children had not started an instrument by the age of 11, they were unlikely to do so.
Music was like a pyramid with a wide base. Plenty of younger performers were needed to sustain the people at the top, he argued. Orchestras are also being threatened by the decline in popularity of minority instruments such as oboes, French horns and bassoons.
By contrast, numbers playing the drums and the electric guitar are rising.
The decline in popularity of the piano continues, though the percentage of those playing its rival, the electronic keyboard, is also down. More teachers are teaching the flute and the saxophone and the number of teachers for whom the piano is the main instrument is falling.
Roger Durston, chairman of the Music Education Council, pointed to evidence that children's overall academic ability improved if they took part in musical activities.
"At a simple level, well motivated people gainfully occupied in playing musical instruments will almost certainly be good citizens, and form part of our attack on crime and the drug culture."
Mark Fisher, minister for the arts, argued that the policy introduced by the last Government of devolving budgets to schools was generally popular. "But we need to identify specific problems which come with devolved budgets."
Chris Smith, Secretary of State for Culture, plans to set up a fund for instrumental tuition using lottery money.Reuse content